S. Arabia not to be made part of CPEC

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ISLAMABAD: Pakistan said on Tuesday that Saudi Arabia would not be made part of the $50 billion China-Pakistan Economic Corridor (CPEC) framework and the kingdom’s proposed investments would fall under a separate bilateral arrangement.

Speaking at a joint news conference with Infor­mation Minister Fawad Chaudhry, Minister for Planning and Development Khusro Bakhtiar said there was no decision to bring a third country, like Saudi Arabia, under the framework of the CPEC.

He was responding to a question about the possibility of Saudi Arabia becoming part of the Joint Working Groups (JWGs) or Joint Coordination Committee (JCC) on the CPEC between China and Pakistan. He said there could be many offshoots of the CPEC where third countries could be inv­olved in trilateral arr­ange­ment for infrastructure development, like China-Pakistan-Japan, China-Pakistan-Saudi Arabia or China-Pakistan-Germany.

Minister says there could be many offshoots of the project where third countries could be involved

“Saudi Arabia is not to become a collateral strategic partner in the CPEC. This impression is not true,” he said, adding that the third country participation in the CPEC was not limited to Saudi Arabia but other countries could also become part of the business and investment ventures arising out of the CPEC. “The framework between China and Pakistan is bilateral and Saudi Arabia is not entering that framework as a third-party investor, rather the base of CPEC will be broadened and its pace will be expedited.”

The planning minister expressed ignorance when asked how the cost of Main Railway Line (ML-I) had been reduced by $2bn from $8.2bn to $6.2bn as claimed by Railways Minister Shaikh Rashid Ahmed. “I have noticed this today that Sheikh Rashid is making some efforts [to reduce cost] but not to my knowledge. Nothing has come in front of me to suggest that the cost has come down.”

He said it was however for the new government to adopt a new model on the basis of financial viability of the ML-1 on build, own and operate (BOT) model so that its loan repayment did not become a responsibility of the government like the previous government which procured loans and built projects on EPC (engineering, procurement and construction) contracts.

Interestingly, the previous government, during whose tenure Mr Bakhtiar was an MNA, had ann­ounced that the ML-1 would be built on BOT model.

In response to a question, Mr Bakhtiar said the CPEC portfolio currently stood at about $50bn, of which about $6bn was government-to-government loan and remaining in IPP mode mostly in the energy sector. About $29bn worth of projects were currently in progress.

He said the CPEC had far bigger potential than $50bn and would keep expanding with time as new projects come up but the previous government treated and played it like a T20 match instead of a five-day test series and focused mostly on projects which could be completed during its tenure.

The minister blamed the PML-N government for irresponsible governance and questioned where it lost $32bn low oil price bonanza. He said the economic growth of the previous government was based on borrowed money that led to increase the national debt.

He said the PML-N government did not pass on the benefit of low prices to the consumers and external debt amounted to 72pc of the GDP and total public debt went beyond Rs28 trillion. He was reminded that external debt was way below almost 31pc of GDP and he agreed.

Likewise, he said only 70,000 people in the country were direct taxpayers and return filers but when challenged said meant those earning income above Rs200,000 per month. He also claimed that the PTI government has banned all power projects on all imported fuels to shift focus on renewable energy sources and hydropower. When reminded that ban on power projects on imported fuels was imposed in May 2016, he said the project already completed and those in progress would go on but if such projects were planned but not started would not be allowed to take off.

He criticised the PML-N government for what he alleged painting artificial economic growth numbers when the losses of state-owned enterprises (SOEs) increased from Rs500bn in five years to Rs1trn and circular debt of the power sector jumping from Rs583bn in 2013 to Rs1.2trn now.

He said that previous two governments had mismanaged the country’s economy to the extent that the present government has to set the direction in every field. He said the PML-N government is taking up the issue of slash in development spending but did not disclose truth to the nation that it is befooling the masses by stating higher allocation whereas actual utilisation was 34pc lower. He said total development spending was Rs661bn last year against an allocation of Rs1trn in the budget.

“They had neither resources nor the will to increase the spending but were showing higher allocation to befool the nation,” he added. The previous government also included 343 unapproved schemes of Rs55bn in development schemes of the last budget which have been excluded from the budget.

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